Wednesday, 25 July 2001

Media Statement - Hon P Hodgson

Max's chickens are coming home

Energy Minister Pete Hodgson has said that the decision by NGC to sell its 290,000 electricity consumers to Genesis had its origins in the forced split of line and energy companies two and a half years ago.

"What we are seeing is a significant shakedown after electricity companies bought and sold one another's customers in the wake of the 1999 Max Bradford reforms.

"At that time it was widely considered that the sale and purchase of customers forced by the previous Government's legislation was taking place at hugely inflated prices. This year's dry winter has caused spot prices to rise and that, combined with On-Energy's surprising exposure to those prices, has triggered the inevitable shakedown, presumably for a more realistic consideration than in 1999.

"It may not be the last such reconfiguration of its type."

The sale will be subject to Commerce Commission scrutiny to ensure that it does not substantially lessen competition, under the newly revised Commerce Act.

ENDS

© Scoop Media